Options Recap — 7/23/2012

Global equity markets are back under pressure on concerns about a worldwide economic slowdown. Hong Kong’s Hang Seng lost 3 percent after a member of China’s Central Bank warned that growth in the world’s second largest economy might slow to 7.4 percent, and below the 7.6 percent seen in the second quarter – which was the least amount in China’s economy in the past three years. The volatility spilled over onto Europe’s shores and was exacerbated by concerns over the European debt crisis after borrowing costs hit records in Spain. Reports that Greece might not receive additional bailouts for lack of achieving commitments also weighed on equity markets. Germany’s DAX lost 3.2 percent. Trading has been orderly in the US, however. Heading into the final hour, the Dow Jones Industrial Average is down 127 points, but 113 points from its worst levels. The NASDAQ lost 38.8 points.

Sentiment is leaning a bit more bearish in the options market. CBOE Volatility Index (.VIX) hit a morning high of 20.49 and was recently up 2.32 to 18.59. Trading is active. With about an hour left to trade, 6.2 million calls and 5.6 million puts traded across the exchanges. We had a few questions today about the high volume in Nexen (NXY) Friday, which was the subject of bullish “risk-reversals”, just before China’s CNOOC made a $27.5 per share buyout of the company – a 61 percent premium to Friday’s closing prices. The activity does indeed seem suspicious. The largest trade Monday is a block of puts in the SPDR Industrials (XLI), which appears to be a short-term hedge. Hefty blocks of puts traded on XLB as well. In contrast to last week, when the energy sector saw an increasingly bullish action, the sector is quiet today after crude oil shed $3.68 to $88.15. However, Kodiak Oil and Gas (KOG) is one name that saw a flurry of bullish trading activity. Among the financials, MS and BX saw large blocks of call buying .Gap Stores (GPS) is seeing bullish flow in the retail sector. Check the day’s Premium Alerts section for more. Also use the “Flow Monitor” and symbol @all to see more notable flow from Monday.

Notable Flow
TWX – Bullish flow detected in Time Warner with 7017 calls trading, or 4x the recent avg daily call volume in the name. Shares near $37.14 (-1.72) with ATMIV lifting by 2.74 point and 56% of todays call premium trading offer side. (Trade-Alert) 14:41

LSI – Bearish activity detected in LSI Corporation with 3419 puts trading, or 2x the recent avg daily put volume in the name. Shares near $6.05 (-0.11) with ATMIV lifting by 1.95 point and 83% of todays put premium trading offer side. (Trade-Alert) 12:51
ALGN – Bearish activity detected in Align Technology (ALGN), with 2911 puts trading, or 2x the recent avg daily put volume in the name. Shares near $33.41 (-0.77) with ATMIV lifting by 5.65 point and 82% of todays put premium trading offer side. (Trade-Alert) 12:31

High options volume is being seen in Sprint (S), Under Armor (UA), and DELL

Movers
Symbol Last Change %Change StdDevs
NXY 26.04 +8.98 +52.6% 20.80
GEOY 20.14 +4.97 +32.8% 5.29
PEET 73.03 +15.87 +27.8% 11.09
ITMN 9.92 -1.79 -15.3% 5.42 Post-Earnings
UVXY 8.34 +1.09 +15.0% 1.65
.BVZ 18.69 +2.42 +14.9% 2.46
.VIX 18.69 +2.42 +14.9% 2.46
.VXEWZ 32.05 +3.93 +14.0% 3.59
PETS 9.72 -1.54 -13.7% 9.05 Post-Earnings
RUSL 22.68 -3.56 -13.6% 2.40

Shakers (Implied volatility Movers)
Symbol IV[30d] IVChg IVChg% SkewAdjChg Last Change
NXY 18.7% -18.0 -49.1% N/A $26.04 +8.98
HAS 24.3% -16.1 -39.9% N/A $35.22 +1.38 Post-Earnings
KOG 90.9% +20.9 +29.8% +20.1 $8.31 -0.30
AMLP 9.3% -2.9 -24.0% N/A $16.49 -0.05
PGH 38.0% +7.3 +23.6% N/A $6.10 -0.14
ETP 19.1% +3.6 +23.1% +2.7 $45.20 -0.42
HNR 77.9% +14.3 +22.5% +12.6 $8.05 -0.59
EWJ 19.3% +3.5 +22.2% +1.6 $8.83 -0.13
EWG 30.0% +5.3 +21.5% N/A $19.00 -0.66
EWH 19.9% +3.5 +21.3% +1.6 $16.33 -0.30

52-Week Highs
32 new highs: .EUI .SFC AGG ARRY AWK BGS BND BOND CUI EUO GY HYD IEF IEI KNDI MDC MRC NAVB NXY PZA RA RTHYL SNAK TIP TLT TMF TOL TXI TYD UBT UST UUP

52-week Lows
183 new lows: .EUU .XDE .XDS AA AB ABX ACH ADTN AMCC AMCN AMD ANAD ANGO ANR APOL APPY APWR ASA ASX ATK ATML ATPG AUO AUQ AVG AVX AXTI AXU BBVA BPI BPZ BSBR CAJ CEL CENX CGX CHGS CHT CLF CMVT CRDN CRME CS CSC CTIC CY DB DEER DELL DHT DRWI DSX EDMC EGO ENVI ENZ ESIO ETFC EWI EWP EXPD FCN FDML FXE FXF GAGA GAME GEVO GILT GM GMCR GME GNK GNW GPRE GURE HGG HPQ HSII IDTI IIVI IMN INFA IRF ISIL ITG IVAC IXYS JAG JCI JKS K KB KCG KEM KOL LEDS LSCC LXK MAKO MAN MATW MATX MCP MCRI MIG MOTR MTOR MTSN MYRG NAFC NCQ NIHD NILE NOR NYMX OIIM OMG OSG PAAS PBW PC PGJ PLTM PST QRM QSII RAH REDF REMX RFP RIC RIMM RSH RSTI RXN SAFM SAN SCSC SHI SID SLH SMS SNE SOHU SONS SORL SPWR SQNS STBZ SVU SYMC TAN TBF TBT TEF TEU THRM TI TLAB TMV TSN TSTC TTT TYO TZOO UBS UDN UDRL ULE ULTR VC VISN VIV WBMD WIT WLT WTSLA WYNN XINGF YGE YINN YZC

Top Equity Blocks
3.03m BCS 9.50 -0.45 -4.5% 11:39:54 – Derivatively Priced
2.50m QQQ 64.20 -1.20 -1.8% 11:31:02
2.01m AMZN 222.97 -5.32 -2.3% 10:40:51
2.00m SPY 136.39 -1.75 -1.3% 13:01:55 – Average Price Trade
2.00m DYNIQ 0.50 +0.01 +2.0% 10:28:34
2.00m FB 28.19 -0.57 -2.0% 09:48:39
1.91m AMD 4.10 -0.12 -2.8% 10:44:12 – Burst
1.66m YHOO 15.68 -0.27 -1.7% 10:29:13 – Tied to Options
1.53m EEM 37.49 -1.09 -2.8% 11:25:11 – Burst
1.50m QQQ 64.20 -0.94 -1.5% 13:38:26

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Category: Market Update